Question
In: Finance
What is asset accumulation method of company valuation? Please compare asset accumulation, market capitalisation, book value,...
What is asset accumulation method of company valuation?
Please compare asset accumulation, market capitalisation, book value, and future earnings methods.
Solutions
Expert Solution
Under Asset Accumulation method, the value of business = current fair value of all assets - current fair value of all liabilities.
Under this method:
- assets also includes any intangible assets.
- liabilites also includes any contingent laibilities
Market Capitalization method: This method can be used only for companies whose stock are traded in the market. As per this method, Value of Company = Market price per share * Number of shares outstanding.
Book Value method: Instead of usind the fair value of assets and liabilities, this method uses the book values. Thus, value of company = Book value of all the assets - book value of all the liabilities. Thus, this method ignores any unrecorded intangibles or contingent liabilities.
Future earnings methods: This method employes time value of money concept. Under this method, the future earnings of the company attributable to stockholders is estimated, then the future terminal value of the company is estimated and using the appropriate discount rate(based on riskiness of the company), these estimated future earnings and terminal value is discounted to calculate the present value of the Company.
jeff jeffy answered 1 year agoRelated Solutions
Please calculate the following ratios: Market value added Market to book ratio Return on Asset The...
Please calculate the following ratios:
Market value added
Market to book ratio
Return on Asset
The Home
Depot, Inc. Cash Flow
All
numbers in thousands
Period
Ending
1/29/17
1/31/16
Net
Income
7,957,000
7,009,000
Operating
Activities, Cash Flows Provided By or Used In
Depreciation
1,973,000
1,863,000
Adjustments To Net Income
267,000
100,000
Changes
In Accounts Receivables
-138,000
-181,000
Changes
In Liabilities
654,000
1,151,000
Changes
In Inventories
-769,000
-546,000
Changes
In Other Operating Activities
-161,000
-23,000
Total
Cash Flow From Operating Activities...
The methods of valuation are the following, market multiples of peer firms, book value, liquidation value,...
The methods of valuation are the following, market multiples of
peer firms, book value, liquidation value, replacement cost, market
value, and comparable transaction multiples. After looking through
valuation techniques, which one do you think is the most effective
and why? (You can research other valuation techniques outside of
the ones listed in the notes as well). (200 words)
The methods of valuation are the following, market multiples of peer firms, book value, liquidation value,...
The methods of valuation are the following, market multiples of
peer firms, book value, liquidation value, replacement cost, market
value, and comparable transaction multiples. After looking through
valuation techniques, which one do you think is the most effective
and why? (You can research other valuation techniques outside of
the ones listed in the notes as well). (200 words)
Compute the book value of the stock, and compare it with the stock market value. Explain...
Compute the book value of the stock, and compare it with the
stock market value. Explain why the stock market value is higher
than its book value.
My company is Tesla (TSLA), how do I do this? What is the
analysis? I am using excel.
If an asset is sold (market value) for more or less than its book value that...
If an asset is sold (market value) for more or less than its
book value that used for tax purposes, and adjustment must be made
to the taxable income during the year. How this difference in
market value and book value affect the taxable income?
Please Answer the questions: 1. What is the difference between book value and market value? Which...
Please Answer the questions:
1. What is the difference between book value and market value?
Which should we use for decision making purposes?
2. What is the difference between accounting income and cash
flow? Which do we need to use when making decisions?
3. What is the difference between average and marginal tax
rates? Which should we use when making financial decisions?
4. How do we determine a firm’s cash flows? What are the
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1. Compare and contrast book value per share and market capitalization.
1. Compare and contrast book value per share and market
capitalization.
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A Asset Valuation = Price B Wealth Accumulation C Funding – Lump sum funds lump sum...
A Asset Valuation = Price B Wealth Accumulation C Funding – Lump
sum funds lump sum D Funding – Lump sum funds ordinary level
annuity E Funding – Lump sum funds delayed level annuity F Funding
– Ordinary level annuity funds lump sum G Funding – Ordinary level
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Classify the problem as one of the above types. Choose Only One You
are thinking about buying a business that you expect will...
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